The comments at the Carnival picked up on a theme I’ve noticed popping up ever since President Obama signed the bill: skepticism that the law will actually curb the industry. A lot of people seem convinced that somehow the industry will find ways around the new rules and continue business as usual.

The gloom and doom may also be in response to the industry’s threats to raise rates on everyone, bring back annual fees, and—most ominously—obliterate grace periods.

The main point of this industry rhetoric was to scare Congress away from legislating, which didn’t work. In reality, it’s against the industry’s interests to actually do away with grace periods, and I’d be shocked if they actually do it. (And certainly, nothing in the law requires them to.) The bigger problem are the nine more months of “anything goes” until the major parts of the law go into effect on February 22, 2010. If your credit card company ramps up its predatory behavior during these intervening months, please let us know!

No matter how the industry responds to the new law, there will be gaps in oversight of both credit cards and the wider industry. See the bottom of this previous post for info about the unfinished credit card business that remains.

A recent editorial from USA Today suggests that the best way to deal with the larger problems in the entire consumer finance industry is the creation of a Financial Product Safety Commission (FPSC), another idea we’ve been championing. As the editorial puts it, oversight of banks is currently “splintered across an array of agencies that tend to treat consumer protection as a stepchild.” An FPSC would consolidate oversight and make consumer protection a priority. Stay tuned for more on this exciting policy prospect.